Google Health Dies, But PHR Market Still Growing

Personal health records will see a 33% gain in revenue through 2015 as doctors push patients to use health IT systems, finds Frost & Sullivan study.

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As the demise of Google Health brings into sharper focus the challenges of establishing an online personal health record (PHR) business model, a study by Frost & Sullivan reveals that the PHR market generated revenue of $312.2 million in 2010 and estimates that revenue will reach $414.8 million in 2015, representing a compound annual growth rate (CAGR) of 5.8%. Further, the report predicts that from 2010 to 2015 the PHR market will realize a 33% increase in revenue.

Released Wednesday, the report, The U.S. Personal Health Records Market: Understanding Technical and Strategic Imperatives around Consumer-Focused Health IT, also states that the use of PHRs among Americans was estimated to be around 7% of the population in 2010, but this number will rise due to increased use of electronic health records (EHRs) and other health IT by providers that will lead to greater awareness of their value.

"PHRs as a component of EHRs will drive the market," said Jessica Ryan Ohlin, Frost & Sullivan's analyst and the report's author. Ohlin explained that the growth of digitized medical records means health data can automatically be collected, consolidated, and fed into PHR platforms giving patients the opportunity to request from their medical providers or payers more of their medical records online.

Other trends in the market that will shift consumers toward further PHR use include structural changes in healthcare, including new collaborative care models; the increasing use of mobile health apps that help consumers overcome security fears as they become more comfortable with the idea of tracking and monitoring their personal health through technological means; and the growing number of older Americans and people with chronic diseases who, along with their caregivers, want to access, manipulate, and monitor their personal health information electronically.

"People will increasingly see the benefits of why they should be using a PHR. Just as moms are interested in having copies of their child's immunization records and caregivers want to have access to their parent's or loved one's information so that they can make decisions on behalf of and with their loved one, people will want all that data to reside in a Web-accessible online portal, which is going to be the way that this all goes," Ohlin said.

The report describes the market as highly volatile and notoriously difficult to forecast because of historically low awareness among consumers and providers, as well as fragmentation of the market which is served by more than 150 providers, insurance companies, IT vendors, and others.

As PHR providers, such as Microsoft, lure consumers to sign up for the service, most Web-based PHR applications are offered for free or at a very low cost as a way to incent consumers and capture revenue by other means (e.g., advertising sales, search engine use, and license fees from applications developers).

One company that won't wait for the PHR market to improve is Google, which announced last week that it will be closing Google Health, an online PHR that the company launched in 2008. Company officials expressed regret that widespread adoption of its PHR service did not occur.

"Google Health leaving the market is sobering. You would think that a company with a great online brand name and a great reputation as an innovator in providing easily accessible and usable information for consumers would be able to operate a fully functioning PHR system," Ohlin said. "Google didn't fully commit to this, they didn't build enough relationships with health IT vendors, payers, providers and other healthcare stakeholders that would leverage the value chain across healthcare, and they relied on consumers--many of whom don't see the need for a PHR."

The report is part of Frost & Sullivan's Healthcare & Life Sciences IT Growth Partnership Service program, which also includes research in the following markets: hospital and ambulatory electronic records, acute care information systems, telehealth and health informatics, cloud computing, social media use among health providers, health information exchange, and health data analytics.

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